2016 Industry Sales Report: Small Distributors Beware

by | Jul 22, 2016

The latest State of the Industry results show the promotional products industry remains strong.  It means that branded merchandise has proven it’s value in the marketing mix. It proves that they stand the test of time when most traditional mediums have suffered in this digital age. With companies massively shifting their marketing budgets to digital mediums, a 5% growth in promotional products sales is important.

This growth trend is excellent news for promo distributors, this is a solid business to be in.

The bad news is that this study also reveals a decline for the smaller distributors.  Unfortunately this is the trend and it’s no surprise, as experts have predicted:  the big will get bigger and the small will get smaller. The gap between the two is widening.  In short, if you are a smaller distributor looking to grow, this is something you can’t ignore.

First, let’s take a look at the numbers in context:

  • A business with sales above $2.5 million is considered large, and under $2.5 million is considered small
  • Smaller distributors captured 44.5 % of the market. Out of them, those with sales of $500,000 to $1 million experienced growth, while those with sales between 1 to 2.5 million showed a decline.
  • Larger distributors took 55.5 % share. However, this number includes franchisors like Proforma and iPROMOTEu, who are made up of small distributor, but report total sales.

The Risk For The Small Distributor

What all this means is that if you’re a small distributor you must pay attention to the writing on the wall. You’ll come across the long-time client who asks you to match a price to one of those large companies. You might find out your client actually purchased from them. You must recognize that this is not an exception but a trend. The large companies have a plan to dominate the marketplace and are out executing it.

So what can you do? The answer is: market your business proactively.

How To Be Proactive With Your Marketing.

No doubt the big guys have deep marketing and advertising pockets, which you don’t. Yet there is a lot you can do, on a budget, to take your piece of the pie.  But it does require marketing strategic planning and execution, as well as a budget.  Most distributors do nothing at all, if you do, you’ll be far ahead of the game.

As you’re well aware, when your potential client has a need for branded merchandise and doesn’t have a vendor in place, they turn to the Internet .  They will never find you if you haven’t done anything to be there. They will find your competitors. Your first order of business is to get on with the online program, and this is simpler than you think.

Understand Your Clients

Your ideal client is not the one price shopping, for them, an online order taker will do.  Your ideal clients want to work with a promotions expert. In addition, they want ongoing assistance in the procurement of the products. Your ability to provide a highly personalized assistance is your top strength over the big sellers.  Make sure you communicate your strengths loud and clear.

Get Your Website Ready For Top Prospects

Your website is your place of business in the digital age. It must reflect how you do business, your point of view and what you stand for.  Your message must communicate the value you provide as an expert and a resource.

If your website is an industry a cookie cutter one it’s doing the opposite. It’s generic and has no personality.  Worse yet, it positions your business as a product outlet, as opposed to a promotions expert. I could go on an on about the many reasons why your website is critical in this business, but let me just say that you need to invest in a proper website.

Show Your Personality

One of the biggest advantages of small businesses over the large ones, is that they are infused with the owner’s personality. This makes for a more authentic relationship with clients, and authenticity is big in the digital age.

This is something a large distributor can never accomplish the way you can. They have many employees and serve many types of people, so no matter how polite they are, they’ll never get to know their clients the way you can. Again, this is a strength to build upon and must shine through in your website.

Get Your Website to Show Up in Search Results

This is not as difficult as it may seem. If your primary market is your local area, there are some basic things you can do to show up organically where your large competitors won’t show at all. Here is a few:

1. Register your business in Google My Business and Google Maps. These are free tools offered by Google. They allow you to showcase your business to people searching the internet. Google always favors local results in searches, so make sure you take full advantage. And did I mention it’s free.

2.  Get a free listing in directories such as Yellow Pages, Yelp, and City Search, among others.  The trick is to fill out ALL the information they ask for, in the same way, in everyone of them.  Especially the address, phone and description of the business.

3. Start collecting reviews from your clients in your Google my Business page. Google tends to favor results that show reviews, so this is a simple way to push your site to the top. Avoid paid review directories, it’s best to have the reviews on your Google page.

Become Social

Social media is the new place to network, in a big way. It is very easy to gain visibility for your business in your local area using social media, especially Facebook and LinkedIn. Both platforms offer the groups feature, where you will find some local groups for your area.

Join relevant groups and start interacting with the other members. Be nice and be helpful. Share your own blog and social media posts, share fun stuff, comment on other people’s posts, and share the occasional offer.  This will drive traffic to your website, and before you know it you will be top of mind.

Start and Maintain a Blog

I’m sure you’ve heard it before: content is the center of online marketing. I’m also sure you have a lot on your plate and work long hours, but if you make the time to write a good piece of content every now and then, it will pay off big time.  Relevant content will help your website get found, and position your business expertise.

If you don’t know what to write about, think of the questions your clients and prospect ask you frequently. These, along with things they should ask but they don’t, will make good topics. If you would like to get deeper into how to write content that works you’ll find this post useful.

Use Self Promos Wisely

You have access to every product there is and most suppliers have special self promo pricing, so there is no excuse.  Show off your creativity.  Group several items in a package and add a romance card that “ties” them together.  Mail these promo packages a few times a year to your clients and hot prospects. Invest in spec samples and mail them with a “thinking of you” note. Make it harder for your competitors to get your client’s attention.

The Point

If you are looking to grow your promo business the opportunities are there. But you need to make a serious marketing effort to stand above the me-too distributors that crowd the marketplace. This will require an investment of time and money, but it will pay off sooner than you think. Keep in mind, very few are doing it, so it can be relatively fast to dominate your marketplace, provide you take the right actions.

If you would like to discuss your current marketing please feel free to contact us. We are here to help!


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